Understanding the Function of Insurance

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What is the major function of insurance?

Ensuring that everyone pays the same premium

Achieving a spread of risk (correct)

Providing financial assistance to the insured

Guaranteeing profits for the insurance company

How does insurance contribute to the basis of credit system?

It creates more risk for lenders

It frees up credit and protects the investments of lenders (correct)

It restricts consumer access to credit

It increases uncertainty for lenders

What is one of the benefits of insurance in relation to worry and entrepreneurship?

It allows people to cover large uncertain future losses and reduces anxiety (correct)

It eliminates the need for insurance altogether

It increases anxiety about future losses

It discourages entrepreneurship

What role do insurers play in terms of employment and investment capital?

Insurers are major employers and investors, employing over 100,000 people Signup and view all the answers

How is risk defined in the context of insurance?

The danger or hazard of a loss of the property insured Signup and view all the answers

What is the other name for 'property and casualty' insurance?

General insurance Signup and view all the answers

Which type of insurance provides protection when insureds are financially responsible for injury or damage they cause to others?

Liability Insurance Signup and view all the answers

Which type of insurer is owned by its policyholders, with the main goal to provide policyholders with insurance at as low a cost as possible?

Mutual Companies Signup and view all the answers

What is the most common method used by insurers to sell their products?

Direct Writing System Signup and view all the answers

Which type of insurer's ownership rests in the shareholders, whose main purpose is to derive profit from their investments?

Private Insurers - Stock Companies Signup and view all the answers

Which type of insurer involves federal and provincial governments in providing various insurance plans?

Government Insurers Signup and view all the answers

Which system involves the brokerage being paid a commission by the insurer on all the business it writes?

Independent Brokerage System Signup and view all the answers

What is the primary incentive for stock companies in providing insurance?

To derive profit from their investments Signup and view all the answers

What does liability insurance provide protection for?

Injury or damage caused to others by insureds Signup and view all the answers

Which type of insurance represents more than 50% of all property and casualty premiums in Canada?

Automobile Insurance Signup and view all the answers

What is the primary purpose of insurance, as described in the text?

To spread the losses of the few among the many Signup and view all the answers

Which aspect is NOT identified as an important point in the analysis of the definition of insurance?

Contribution to Loss Prevention and Loss Reduction Signup and view all the answers

What is one of the benefits of insurance in relation to worry and entrepreneurship?

Reduction in anxiety about future losses Signup and view all the answers

Which type of insurer's ownership rests in the shareholders, whose main purpose is to derive profit from their investments?

Stock Insurance Company Signup and view all the answers

What does liability insurance provide protection for, according to the text?

Protection against financial responsibility for injury or damage caused to others Signup and view all the answers

How does insurance contribute to the basis of credit system, as mentioned in the text?

By freeing up credit and protecting lenders' investments Signup and view all the answers

Which type of insurance represents the second largest source of premiums to insurers?

Property Insurance Signup and view all the answers

What other name is given to the area of insurance known as 'property and casualty (P&C) insurance'?

General Insurance Signup and view all the answers

Which system involves the brokerage being paid a commission by the insurer on all the business it writes?

Independent Brokerage System Signup and view all the answers

What is the primary incentive for stock companies in providing insurance?

Profit Maximization Signup and view all the answers

Which type of insurer is owned by its policyholders, with the main goal to provide policyholders with insurance at as low a cost as possible?

Mutual Companies Signup and view all the answers

Which type of insurance provides protection when insureds are financially responsible for injury or damage they cause to others?

Liability Insurance Signup and view all the answers

What type of risk is defined in the context of insurance?

Pure Risk Signup and view all the answers

Which type of insurer's ownership rests in the shareholders, whose main purpose is to derive profit from their investments?

Private Insurers (Stock Companies) Signup and view all the answers

What is one of the benefits of insurance in relation to worry and entrepreneurship?

Economic Stability Signup and view all the answers

What does liability insurance provide protection for?

Injury or damage caused to others Signup and view all the answers

Understanding the Function of Insurance

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Questions and Answers

What is the major function of insurance?

How does insurance contribute to the basis of credit system?

What is one of the benefits of insurance in relation to worry and entrepreneurship?

What role do insurers play in terms of employment and investment capital?

How is risk defined in the context of insurance?

What is the other name for 'property and casualty' insurance?

Which type of insurance provides protection when insureds are financially responsible for injury or damage they cause to others?

Which type of insurer is owned by its policyholders, with the main goal to provide policyholders with insurance at as low a cost as possible?

What is the most common method used by insurers to sell their products?

Which type of insurer's ownership rests in the shareholders, whose main purpose is to derive profit from their investments?

Which type of insurer involves federal and provincial governments in providing various insurance plans?

Which system involves the brokerage being paid a commission by the insurer on all the business it writes?

What is the primary incentive for stock companies in providing insurance?

What does liability insurance provide protection for?

Which type of insurance represents more than 50% of all property and casualty premiums in Canada?

What is the primary purpose of insurance, as described in the text?

Which aspect is NOT identified as an important point in the analysis of the definition of insurance?

What is one of the benefits of insurance in relation to worry and entrepreneurship?

Which type of insurer's ownership rests in the shareholders, whose main purpose is to derive profit from their investments?

What does liability insurance provide protection for, according to the text?

How does insurance contribute to the basis of credit system, as mentioned in the text?

Which type of insurance represents the second largest source of premiums to insurers?

What other name is given to the area of insurance known as 'property and casualty (P&C) insurance'?

Which system involves the brokerage being paid a commission by the insurer on all the business it writes?

What is the primary incentive for stock companies in providing insurance?

Which type of insurer is owned by its policyholders, with the main goal to provide policyholders with insurance at as low a cost as possible?

Which type of insurance provides protection when insureds are financially responsible for injury or damage they cause to others?

What type of risk is defined in the context of insurance?

Which type of insurer's ownership rests in the shareholders, whose main purpose is to derive profit from their investments?

What is one of the benefits of insurance in relation to worry and entrepreneurship?

What does liability insurance provide protection for?

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